MP urges boycott of hospital firms

PUBLISHED: 10:25 17 June 2006 | UPDATED: 11:02 22 October 2010


Britain's public services were last night urged to boycott the five major corporations behind the £229m Norfolk and Norwich University Hospital until they share more of their windfall profits with the NHS.


Britain's public services were last night urged to boycott the five major corporations behind the £229m Norfolk and Norwich University Hospital until they share more of their windfall profits with the NHS.

Norman Lamb, the Liberal Democrat MP for North Norfolk, urged councils and other public bodies to “think very carefully” before working in future with Barclays, Innisfree, 3i, Serco and John Laing - the companies behind the Octagon consortium which built the new N&N at Colney, near Norwich.

The MP has also written to the top executives of the five corporations and urged them to make a £7m donation to hospital coffers to “rebuild public trust” in deals between the public and private sector.

Last night, the boycott calls were backed by union leaders at the N&N, who said people angered by the private finance deal might now consider “disinvesting” in the five companies.

Octagon has already turned down a request from David Prior, the chairman of the N&N board, to give a cash gift to the hospital.

Mr Prior had asked the consortium to share more of the windfall profits with the NHS - and pledged to spend any cash gift on upgrading the angioplasty suite used by heart patients, redecorate facilities for children and bring a state-of-the-art cancer scanner to the N&N.

Calls for Octagon to make a donation to the N&N followed stinging criticism of the consortium by a parliamentary select committee for making an additional £75m profit on the private-finance (PFI) project by renegotiating - “refinancing” - its loans in 2003, once construction of the hospital was complete.

Mr Lamb said: “I have no difficulty with public-private partnerships - indeed, I support them. But it is not acceptable for companies to make windfall profits and not respond to criticism from a respected parliamentary committee and think that it is just business as usual. They have to accept there are consequences to what they do.

“I would ask public-sector organisations to think very carefully about doing business with them.”

Mr Lamb's move was backed by Harry Seddon, Unison branch secretary at the N&N, who said: “I think it's absolutely right to point to the organisations behind Octagon, which is only a shell for the private finance deal. If people realise who it is who is behind Octagon - like Barclays Bank, an organisation with a proud Norfolk history - it puts the spotlight where it belongs.

“There's no Octagon shareholders' meeting where the public can attend and say what they think.”

A spokesman for Serco - which holds a 5pc stake in Octagon and is involved in the day-to-day running and maintenance of the hospital - said: “We received Mr Lamb's letter today and we'll look at it carefully and send a reply in due course.”

Other members of the consortium approached by the EDP were unavailable for comment.

Ironically, Ian Gibson, Labour MP for Norwich North, criticised Mr Lamb for “breaking ranks” with other MPs over the hospital - even if his “political instincts” inclined him towards endorsing a boycott.

“I was waiting to hear from the chief executive of Octagon about when he would set a date to meet and discuss the hospital with all of Norfolk's MPs - that's the courteous thing to do,” he said. “When you have seen the minister together as MPs and then one of you goes on off on your own, it seems a little over the top.”

The debate about the N&N deal was raised again in Parliament yet again last week, when government spokesman Lord McKenzie of Luton told the House of Lords that there was a “need to ensure that we understand the lessons, particularly of refinancing” after what had happened in Norwich.

The renewed calls for Octagon to make a financial donation to the N&N come as the hospital faces a £15m budget deficit this year - amid fears there will be big job cuts.

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